Independent technology group Cohort has acquired UK-based integrated fire control and tracking systems supplier Chess Technologies.

The company is being acquired from funds managed by Beringea for a total cash consideration of up to £41.9m.

Chess Technologies’ integrated fire control and tracking systems are deployed on military vehicles and naval ships worldwide. It operates two businesses, Chess Dynamics and Vision4ce.

Once the transaction is closed, the company will initially pay £20.1m for 81.84% of Chess and a further £12.7m in 2021. This earn-out consideration will be paid based on Chess’ revenue performance in the three years.

After 30 April 2021, Cohort will buy the remaining shares in Chess for up to £9.1m depending on performance.

“We believe Chess has great potential and a clear and sustainable competitive advantage, and we are excited about the opportunities that the business can generate.”

Cohort chief executive officer Andrew Thomis said: “The acquisition of Chess represents a significant expansion for Cohort, adding a profitable and growing fifth standalone business to our portfolio. It is highly complementary to our core capabilities in defence and security, underpinned by long-term contracts with quality global customers and a strong order pipeline, including on long-term programmes.

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“We believe Chess has great potential and a clear and sustainable competitive advantage, and we are excited about the opportunities that the business can generate as part of the Cohort Group.

“Overall, the acquisition strengthens and broadens the Group’s portfolio and is expected to be immediately earnings enhancing. We are looking forward to working with the Chess team to realise the exciting growth opportunities that this transaction will create.”

With over 140 employees, Chess has additional facilities in Plymouth and Wokingham in the UK, and a US office in Denver, Colorado. The company’s management team has been retained.

The deal, which is being funded from Cohort’s existing cash resources and banking facility, also represents Cohort’s first positioning in US defence.

Chess reported revenues of £18.2m compared to £16.5m last year and EBIT of £2.4m in the year ending 30 April 2018.